Accumulator Five by National Western Life is a fixed annuity that has a one year fixed rate and a ten-year surrender charge period. The annuity is a single premium deferred fixed annuity. It is mostly aimed as a retirement accumulation planning vehicle and contains terminal benefits. The product has the advantages of interest accumulation, liquidity, tax deferral and safety
All premium payments within the first year will earn a guaranteed interest rate of 7.5% which is composed of a 2.5% base rate and a 5.00% interest for the first year only.
NWL Accumulator Five Features
Minimum and maximum premiums
The minimum single premium for this annuity is $5,000. The maximum single premium is $1,500,000. Flexible premiums are allowed with the NWL Accumulator Five Annuity over the annuity’s life. There are also provisions for additional premiums or payroll deductions. These both have minimum amounts of $100.
The annuity provides for market value adjustment but provides a free 20 day lookup period and a 45 day rate lock protection period. This may however vary by state.
Issue age
The NWL Accumulator Five annuity is issued to people aged between 0-85 years for the policy owner. Annuitants have an age restriction band ranging between 0 and 85 years. The age restriction for annuitization stands at 95 years. Several states have slight differences.
Free Withdrawals
This annuity allows policy holders to make 1 free withdrawal per policy year each limited to a maximum 10% the value of the annuity. The withdrawal is based on accumulation. Holders can also withdraw the interest amount only if they wish to. This is however only available after 30 days.
Above the 10% free withdrawal amount, 10.00% for the first years and reduce gradually as follows: 10.00%, 9.00%, 9.00%, 8.00%, 7.00%, 6.00%, 5.00% and 5.00% and 5.00% for year 10. The minimum amount for the free withdrawal is $100 and the account must remain with at least $5,000.
Market value adjustment
A market value adjustment will be made to the accumulation account if withdrawals are made during the first ten years. The change in the amount will depend on the prevailing interest rates.
Loan provision
From the second month of the contract, a policy loan may be taken for a minimum of $500 and up to 60% of the accumulation account. For the loan, each repayment must be at least $25.
Annuitization
The annuitization option is not available in all states. Annuitants have several settlement options with the annuity. These include Income for life, Proceeds held at interest, Life income with guaranteed period, Survivorship annuity, Annual income for a fixed period, Monthly income for a fixed period and Life income with installment refund.
Systematic withdrawals
Systematic withdrawals are available with the NWL Accumulator Five annuity. These can only be done on a monthly, quarterly, semi-annual, or annual basis. The minimum amount that can be withdrawn is $100 while the minimum account value is $2,000.
Death benefit
The death benefit will be paid to the named beneficiary. If the death occurs before the maturity date, the beneficiary receives a lump sum of the accumulated amount or as they may elect under one of the settlement options. There is also a spousal continuation benefit where the surviving spouse becomes the annuitant and continues both the annuity and tax deferral.
State specific
This product was not available in AK CA CT DE FL IN MA MN MO NJ NY OR PA TX and WA as of March 1, 2017.
